Rule of thumb in Auction increments when bidding??

tenke

Hi,

Hope some experienced people in auction bidding can throw some light on this...

When you buy a property in an auction and the price is lets suppose £ 60,000 plus ... would be more or less certain to assume they want at least 20k more? Is there a rule of thumb about this?

I read somewhere online that if it says guide price 60k to 70k, it usually goes for 65k ... but which are the expectations of £ x plus??

Also if you put an offer with the EA doing viewings, can that lead to sold prior or you need to go to the auction venue yes or yes and once there try to buy it prior??

And one last question, if you need to survey the property can that be done after you apply for the mortage with the bank?
We have a mortage promise already...

Hope all the scribbling makes sense !!;)

before_hollywood

as far as i know it goes up about 5k a time if there are plenty of interested parties or up by 1 or 2k if there is little interest or if a party offers for example 61k from 60k

PasturesNew

It goes up in chunks that the auctioneer decides, until a bidder indicates they want to go up by a smaller amount, such as £1k, or even £500... there will be ways that you can indicate "and a bit, but not what you want it to go up by" and the auctioneer will confirm the "bit" with you if he's unsure what your hand signals are meaning.

sandiep

Always set your limit at one or two bids over a round number. Lots of people will drop out on the £100k for example, but if your limit is £112k you find you may well get it.

But stick to your limit. Don't get carried away because there will always be other houses.

Prices depend purely on who's bidding. If you and some other person really really want it, then the estimate will be shattered. If noone in the room wants it it will remain unsold. The estimate is usually a guide to the reserve rather than the actual selling price.

spuds_2

Here are a few sites with info about buying at auction:

http://www.halifaxauctions.co.uk/buying-at-auction

http://www.mainandmain.co.uk/pdf/buyers_guide.pdf


As to the guide price, I can only speak from watching Homes Under the Hammer, but I have only rarely seen houses go for around the guide price. They usually seem to go for quite a lot more eg 20%. The guide price is to arouse interest, so they seem to set it a fair bit lower than they expect to reach.

Increments go up in £5k, then £1k as interest wains. They often seem to stop around the stamp duty limits.

You can make offer before the auction - but if they feel that the auction will get a better price or they need a quick sale, they may choose to carry on with the auction route. Occasionally on HUTH, someone buys a property for less than they had offered through the EA. If you really like the house and have a fixed limit, you may as well make an offer beforehand and see what the response is.

If you are getting a mortgage, you need the property surveyed before the auction - to make sure the bank will lend on it. Also, they will say how much they will lend you on that particular house. On the auction day you are expected to have your finances in place - a 10% deposit I think - and if you don't pay the rest within the time limit (around 10 days) you will lose that deposit.

This is the tricky thing about auctions - you could pay £500 for a survey and then not get the property. Hope this helps.

tenke

spuds wrote: »

Here are a few sites with info about buying at auction:

http://www.halifaxauctions.co.uk/buying-at-auction

http://www.mainandmain.co.uk/pdf/buyers_guide.pdf


As to the guide price, I can only speak from watching Homes Under the Hammer, but I have only rarely seen houses go for around the guide price. They usually seem to go for quite a lot more eg 20%. The guide price is to arouse interest, so they seem to set it a fair bit lower than they expect to reach.

Increments go up in £5k, then £1k as interest wains. They often seem to stop around the stamp duty limits.

You can make offer before the auction - but if they feel that the auction will get a better price or they need a quick sale, they may choose to carry on with the auction route. Occasionally on HUTH, someone buys a property for less than they had offered through the EA. If you really like the house and have a fixed limit, you may as well make an offer beforehand and see what the response is.

If you are getting a mortgage, you need the property surveyed before the auction - to make sure the bank will lend on it. Also, they will say how much they will lend you on that particular house. On the auction day you are expected to have your finances in place - a 10% deposit I think - and if you don't pay the rest within the time limit (around 10 days) you will lose that deposit.

This is the tricky thing about auctions - you could pay £500 for a survey and then not get the property. Hope this helps.

Thanks for the info, I really appreciate it :T

Now when you say the property needs to be surveyed before giving a mortage, does that mean they will take an indenpedent surveyor, not the bank's own, opinion when deciding?

We have a promise mortage with Halifax and were in the process of buying a house on the normal process, but when it had to be valued, they made us pay to get it valued by their surveyor...

hamblettamaud

they pretty much do it as they do in "bargain hunt", except on a larger scale. it's large increments if a lot of interest (saves wasting time). when the bids start to slow then they will sometimes accept smaller increments, even half-increments. if you want to you can just shout out an extra £500 or so and it's up to the auctioneer whether to accept bid or not.

Doozergirl

The survey you need for mortgage purposes is the banks valuation survey. They will absolutely not accept any other form of valuation from any other surveyor.

You can have your own survey carried out which might determine whether the building provides suitable security for a mortgage but the only way you will know if Halifax will lend at the correct amount it by getting them to value it themselves.

The reserve on a property is often set between the guide prices but this is certainly not a given. What it actually goes for there is no rhyme or reason to - it's totally dependent on what people are prepared to pay. You will often find guides that are set much lower than the actual reserve to attract attention.

If you have done enough research, viewed enough houses, scoured rightmove, checked sold prices and assessed the legals and structure then you will have the best idea of what the property is worth. Don't use the guide to value it.

Doozergirl

Okay, from the stuff about the increments the bidding goes up in I can see how many people read the title, but how many people actually read the OP? Or further?

tenke

Doozergirl wrote: »

Okay, from the stuff about the increments the bidding goes up in I can see how many people read the title, but how many people actually read the OP? Or further?

Attention to detail, I like that !!!;)

tenke

Doozergirl wrote: »

The survey you need for mortgage purposes is the banks valuation survey. They will absolutely not accept any other form of valuation from any other surveyor.

You can have your own survey carried out which might determine whether the building provides suitable security for a mortgage but the only way you will know if Halifax will lend at the correct amount it by getting them to value it themselves.

The reserve on a property is often set between the guide prices but this is certainly not a given. What it actually goes for there is no rhyme or reason to - it's totally dependent on what people are prepared to pay. You will often find guides that are set much lower than the actual reserve to attract attention.

If you have done enough research, viewed enough houses, scoured rightmove, checked sold prices and assessed the legals and structure then you will have the best idea of what the property is worth. Don't use the guide to value it.

Thanks for your thorough answer.

I still have a doubt though, if I need to have the mortage in place with Halifax, just as an example, how does that crystalize with the price?

What I mean, maybe I want to pay 70k for a property that starts 60k, but I am not sure that will be the final price... so how can the bank give a mortage even in principle when the final amount is not yet stablished?

Also how will that influence the surveyor's valuation? which parameter will he have to value the property? guide price or my intended price when asking a possible mortagage?

Hope this makes sense somehow ....:o